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UMC Reports First Quarter 2017 Results

Board of Directors propose NT$0.50 per share cash dividend; anticipate flat 2Q17 outlook

First Quarter 2017 Overview1:

TAIPEI, Taiwan — (BUSINESS WIRE) — April 26, 2017 — United Microelectronics Corporation (NYSE: UMC; TWSE: 2303) (“UMC” or “The Company”), a leading global semiconductor foundry, today announced its consolidated operating results for the first quarter of 2017.

First quarter consolidated revenue was NT$37.42 billion, down from NT$38.31 billion in 4Q16 and up 8.8% YoY from NT$34.40 billion in 1Q16. 1Q17 consolidated gross margin was 19.9%. Net income attributable to the stockholders of the parent was NT$2.29 billion, with earnings per ordinary share of NT$0.19.

Mr. Po-Wen Yen, CEO of UMC, said, “In the first quarter of 2017, UMC’s revenue from foundry operations was NT$37.35 billion. Robust chip demand lifted overall capacity utilization to 96%, bringing wafer shipments to 1.68 million 8-inch equivalent wafers. Gross margin was 20.1%. During the quarter, the utilization rates in 8” fabs as well as 12” advanced nodes approached near full capacity, driven by the strength in consumer and communication segments. Recently, Taiwan’s government authorities approved UMC’s application to license 28nm technology to our subsidiary company, United Semiconductor in Xiamen. This licensing approval will help Fab 12X to ramp its manufacturing scale, expand its process technology offerings and complements UMC’s overall growth strategy. The production ramp of Fab 12X will also help our customers diversify their foundry manufacturing and enhance UMC’s exposure to the Chinese semiconductor supply chain.”

CEO Yen continued, “Looking into the second quarter, despite recent headwinds in foreign exchange markets, we anticipate a relatively flat outlook for 2Q17. Furthermore, current forecasts reflect a pick-up in mature 12” wafer business due to higher demand from wireless, internet of things (IoT) and consumer electronics. However, the increased demand in legacy 300mm wafer shipments will be offset by a decline in 28nm business. In terms of advanced nodes, we started shipping 14nm wafers to customers in the first quarter of 2017. As we transition from 28nm to 14nm manufacturing, we expect our 14nm shipments to sequentially increase in 2Q17. With our manufacturing technologies making steady progress, we continue to strike a balance between maintaining disciplined CAPEX planning while ensuring the interests of our shareholders. As a result, our board of directors has proposed a cash dividend distribution of approximately NT$0.50 per share, which will be subject to shareholders’ approval during UMC’s Annual General Meeting on June 8, 2017.”

Summary of Operating Results

Operating Results
(Amount: NT$ million)   1Q17   4Q16   QoQ %
change 		  1Q16   YoY %
change
Net Operating Revenues   37,418   38,306   (2.3 )   34,404   8.8
Gross Profit 7,428 8,759 (15.2 ) 5,034 47.6
Operating Expenses (6,211 ) (6,627 ) (6.3 ) (5,065 ) 22.6
Net Other Operating Income and Expenses 154 144 6.9 15 926.7
Operating Income (Loss) 1,371 2,276 (39.8 ) (16 ) -
Net Non-Operating Income and Expenses (304 ) (1,210 ) (74.9 ) 46 -
Net Income Attributable to Stockholders of the Parent 2,286 2,548 (10.3 ) 210 988.6

EPS (NT$ per share)

0.19 0.21 0.02
(US$ per ADS)   0.031     0.035         0.003      

In 1Q17, net operating revenues decreased 2.3% to NT$37.42 billion, including NT$37.35 billion from the foundry segment. Revenue from 28nm and 40nm contribution was 17% and 29%, respectively. Gross profit declined 15.2% to NT$7.43 billion, or 19.9% of revenue. Operating expenses decreased 6.3% to NT$6.21 billion. Net other operating income was NT$154 million, leading to an operating income of NT$1.37 billion. Net non-operating expense was NT$304 million. Net income attributable to stockholders of the parent was NT$2.29 billion.

Earnings per ordinary share for the quarter was NT$0.19. Earnings per ADS was US$0.031. The basic weighted average number of outstanding shares in 1Q17 was 12,208,239,978, compared with 12,208,239,978 shares in 4Q16 and 12,408,239,978 shares in 1Q16. The diluted weighted average number of outstanding shares was 13,418,016,296 in 1Q17, compared with 13,442,173,503 shares in 4Q16 and 12,492,270,590 shares in 1Q16. The fully diluted share count on March 31, 2017 was approximately 13,834,095,000. On March 31, 2017, UMC held 400 million treasury shares acquired from the 16th and 17th share buy-back programs.

Detailed Financials Section

COGS & Expenses
(Amount: NT$ million)   1Q17   4Q16   QoQ %
change 		  1Q16   YoY %
change
Net Operating Revenues   37,418   38,306   (2.3 )   34,404   8.8
COGS (29,990 ) (29,547 ) 1.5 (29,370 ) 2.1
Depreciation (11,032 ) (11,314 ) (2.5 ) (10,424 ) 5.8
Other Mfg. Costs (18,958 ) (18,233 ) 4.0 (18,946 )

0.1

Gross Profit 7,428 8,759 (15.2 ) 5,034 47.6
Gross Margin (%) 19.9 % 22.9 % 14.6 %
Operating Expenses (6,211 ) (6,627 ) (6.3 ) (5,065 ) 22.6
G&A (1,050 ) (1,521 ) (31.0 ) (970 ) 8.2
Sales & Marketing (1,170 ) (1,282 ) (8.7 ) (1,010 ) 15.8
R&D (3,991 ) (3,824 ) 4.4 (3,085 ) 29.4
Net Other Operating

Income & Expenses

154 144 6.9 15 926.7
Operating Income

(Loss)

  1,371     2,276     (39.8 )   (16 )   -

Net operating revenues decreased to NT$37.42 billion. COGS increased to NT$29.99 billion, as depreciation declined 2.5% to NT$11.03 billion. Other manufacturing costs rose 4.0% to NT$18.96 billion, including the production ramp costs associated with Fab 12X. Gross profit was NT$7.43 billion. Operating expenses declined 6.3% to NT$6.21 billion. G&A expense decreased 31% to NT$1.05 billion and Sales & Marketing declined by 8.7% to NT$1.17 billion. R&D expense increased 4.4% to NT$3.99 billion, or 10.7% of net operating revenues. Net other operating income was NT$154 million, leading to an operating income of NT$1.37 billion.

 
Non-Operating Income and Expenses
(Amount: NT$ million)   1Q17   4Q16   1Q16
Non-Operating Income and Expenses   (304 )   (1,210 )   46
Net Interest Income and Expenses (472 ) (418 ) (57 )
Net Investment Gain and Loss 166 (1,138 ) (14 )
Gain and Loss on Disposal of Investment 488 1,023 223
Exchange Gain and Loss (517 ) (496 ) (167 )
Other Gain and Loss   31     (181 )   61  

Net non-operating expense in 1Q17 was NT$304 million. The NT$488 million gain on disposal of investment was offset by the NT$517 million exchange loss recognized in 1Q17. Net interest expense totaled NT$472 million.

 

Cash Flow Summary

(Amount: NT$ million)  

For the 3-Month
Period Ended
Mar. 31, 2017

 

For the 3-Month
Period Ended
Dec. 31, 2016

Cash Flow from Operating Activities   13,311   15,546
Net income before tax 1,067 1,066
Depreciation & Amortization 13,292 13,376
Gain on disposal of investments (488 ) (1,023 )
Impairment loss on financial assets 287 233
Impairment loss on non-financial assets - 837
Exchange loss (gain) on financial assets and liabilities (624 ) 1,114
Changes in working capital 580 (164 )
Income tax paid (451 ) (146 )
Other (352 ) 253
Cash Flow from Investing Activities (16,293 ) (18,321 )
Capital expenditures (17,654 ) (21,905 )
Proceeds from disposal of AFS financial assets 701 1,582
Acquisition of investments accounted for under the equity method - (840 )
Acquisition of intangible assets (378 ) (316 )
Other 1,038 3,158
Cash Flow from Financing Activities 7,845 4,221
Bank loans 783 4,230
Bonds Issued 8,300 -
Other (1,238 ) (9 )
Effect of Exchange Rate (1,630 ) 867
Net Cash Flow   3,233     2,313  

Cash inflow from operating activities reached NT$13.31 billion. Cash outflow from investing activities totaled NT$16.29 billion, including NT$17.65 billion in CAPEX spending for the foundry segment, resulting in a free cash outflow of NT$4.34 billion. Cash inflow from financing activities was NT$7.85 billion, mainly due to a cash inflow of NT$8.30 billion in bond issuance. Net cash inflow in 1Q17 was NT$3.23 billion. Over the next 12 months, the company expects to repay NT$2.50 billion in bank loans.

 
Current Assets
(Amount: NT$ billion)   1Q17   4Q16   1Q16
Cash and Cash Equivalents   60.81   57.58   59.54
Notes & Accounts Receivable 20.88 23.05 19.65
Days Sales Outstanding 54 54 52
Inventories, net 16.26 17.00 15.84
Days of Inventory 51 53 52
Total Current Assets   111.54   110.47   101.92

Cash and cash equivalents increased to NT$60.81 billion, mainly due to NT$8.30 billion in bond issuance. Days of inventory decreased to 51 days.

 
Liabilities
(Amount: NT$ billion)   1Q17   4Q16   1Q16
Total Current Liabilities   66.87   71.98   41.63
Notes & Accounts Payable 6.44 6.85 6.32
Short-Term Credit / Bonds 36.34 31.05 11.74
Payable on Equipment 6.41 15.04 8.25
Other 17.68 19.04 15.32
Long-Term Credit / Bonds 62.31 60.73 48.72
Long-Term Investment Liabilities 19.47 20.31 19.28
Total Liabilities 162.70 167.91 116.49
Debt to Equity   75 %   77 %   51 %

Current liabilities decreased to NT$66.87 billion, mainly due to the decrease in payable on equipment. Short-term credit/bonds increased to NT$36.34 billion. Total liabilities decreased to NT$162.70 billion, leading to a debt to equity ratio of 75%.

Analysis of Revenue2 for Foundry Segment

Revenue Breakdown by Region
Region   1Q17   4Q16   3Q16   2Q16   1Q16
North America   41 %   48 %   52 %   49 %   48 %
Asia Pacific   50 %   45 %   42 %   45 %   45 %
Europe   5 %   4 %   4 %   4 %   3 %
Japan   4 %   3 %   2 %   2 %   4 %

Revenue from Asia Pacific customers increased to 50% of sales, while revenue contribution from North American customers decreased to 41%.

 
Revenue Breakdown by Geometry
Geometry   1Q17   4Q16   3Q16   2Q16   1Q16
28nm and below   17 %   22 %   21 %   17 %   8 %
28nm<x<=40nm   29 %   26 %   27 %   26 %   29 %
40nm<x<=65nm   13 %   14 %   15 %   18 %   19 %
65nm<x<=90nm   4 %   3 %   4 %   4 %   4 %
90nm<x<=0.13um   11 %   11 %   11 %   11 %   12 %
0.13um<x<=0.18um   13 %   11 %   11 %   12 %   13 %
0.18um<x<=0.35um   10 %   10 %   8 %   9 %   12 %
0.5um and above   3 %   3 %   3 %   3 %   3 %

28nm revenue declined to 17% in 1Q17, reflecting lower wafer shipments for the communication segment. 40nm accounted for 29% of sales.

 
Revenue Breakdown by Customer Type
Customer Type   1Q17   4Q16   3Q16   2Q16   1Q16
Fabless   93 %   93 %   93 %   93 %   91 %
IDM   7 %   7 %   7 %   7 %   9 %

Revenue from fabless customers remained at 93% in 1Q17.

 
Revenue Breakdown by Application (1)
Application   1Q17   4Q16   3Q16   2Q16   1Q16
Computer   12 %   13 %   12 %   11 %   15 %
Communication   51 %   53 %   55 %   55 %   48 %
Consumer   28 %   26 %   26 %   27 %   30 %
Others   9 %   8 %   7 %   7 %   7 %

Communication business represented 51% of sales, while consumer business increased to 28%. Computing segment decreased to 12%.

(1) Computer consists of ICs such as CPU, GPU, HDD controllers, DVD/CD-RW control ICs, PC chipset, audio codec, keyboard controller, monitor scaler, USB, I/O chipset. Communication consists of handset components, broadband, WLAN, bluetooth, Ethernet, LAN, DSP, etc. Consumer consists of ICs used for DVD players, DTV, STB, MP3/MP4, flash controller, game consoles, DSC, smart cards, toys, etc.



Blended ASP Trend for Foundry Segment

Blended average selling price (ASP) decreased during 1Q17.

(To view ASP trend, visit http://www.umc.com/english/investors/1Q17_ASP_trend.asp)

Shipment and Utilization Rate3 for Foundry Segment

Wafer Shipments
    1Q17   4Q16   3Q16   2Q16   1Q16
Wafer Shipments
(8” K equivalents) 		  1,678     1,656     1,569     1,514     1,432  
 
Quarterly Capacity Utilization Rate
    1Q17   4Q16   3Q16   2Q16   1Q16
Utilization Rate   96 %   94 %   89 %   89 %   82 %
Total Capacity
(8” K equivalents) 		  1,742     1,794     1,774     1,723     1,692  

Wafer shipments increased to 1,678K in 1Q17. Quarterly capacity decreased 2.9% QoQ to 1,742K, leading to an overall utilization rate of 96% in 1Q17.

Capacity4 for Foundry Segment

Overall capacity in the first quarter was 1,742K 8-inch equivalent wafers. Estimated capacity in the second quarter will increase to 1,816K 8-inch equivalent wafers, primarily due to capacity expansion at Fab 12A and Fab 12X.

Annual Capacity in
thousands of wafers

     

Quarterly Capacity in
thousands of wafers

FAB   Geometry
(um) 		  2016     2015     2014     2013     FAB   2Q17E   1Q17   4Q16   3Q16
WTK   6"   3.5 – 0.45   423     421     448     448     WTK   106   104   106   106
Fab 8A   8"   0.5 – 0.25   827     813     813     813   Fab 8A   207   204   207   207
Fab 8C   8"   0.35 – 0.11   348     347     347     347   Fab 8C   87   86   87   87
Fab 8D   8"   0.13 – 0.09   342     341     358     382   Fab 8D   86   84   86   86
Fab 8E   8"   0.5 – 0.18   419     418     418     418   Fab 8E   105   103   105   105
Fab 8F   8"   0.18 – 0.11   401     388     388     388   Fab 8F   102   100   102   102
Fab 8S   8"   0.18 – 0.11   336     335     335     335   Fab 8S   84   83   84   84
Fab 8N   8"   0.5 – 0.11   750     667     547     469   Fab 8N   188   185   188   188
Fab 12A   12"   0.13 – 0.028   885     793     700     651   Fab 12A   247   226   233   233
Fab 12i   12”   0.13 – 0.040   584     572     573     550   Fab 12i   134   137   148   148
Fab 12X   12”   0.040   9     -     -     -   Fab 12X   19   10   9   -
Total(1)   6,983     6,617     6,323     6,107   Total   1,816   1,742   1,794   1,774
YoY Growth Rate   6 %   5 %   4 %   11 %        

(1)One 6-inch wafer is converted into 0.5625(62/82) 8-inch equivalent wafer; one 12-inch wafer is converted into 2.25(122/82) 8-inch equivalent wafers. Capacity total figures are expressed in 8-inch equivalent wafers.

CAPEX for Foundry Segment

Capital Expenditure by Year - in US$ billion
Year     2016     2015     2014     2013     2012
CAPEX   $ 2.8   $ 1.9   $ 1.4   $ 1.1   $ 1.7

2012 figures account for UMC parent company only.

 

2017 CAPEX Plan

8"  

12"

 

Total

9%

 

91%

 

US$2.0 billion

CAPEX spending in 1Q17 totaled US$564 million. Full year 2017 CAPEX plan is budgeted for US$2.0 billion.

Second Quarter of 2017 Outlook & Guidance

Quarter-over-Quarter Guidance:

Recent Developments / Announcements

Apr. 13, 2017

 

UMC Files Form 20-F for 2016 with US Securities and Exchange Commission

Mar. 14, 2017

UMC and Synopsys Collaboration Speeds 14-nm Custom Design

Feb. 23, 2017

UMC Enters Mass Production for 14nm Customer ICs

Feb. 22, 2017

UMC Board of Directors Announces Proposals for its Annual Shareholders Meeting

Feb. 02, 2017

Panasonic and UMC Partner for 40nm ReRAM Process Platform

Jan. 23, 2017

UMC 4Q 2016 Financial Results

Please visit UMC’s website for further details regarding the above announcements

Conference Call / Webcast Announcement

Wednesday, April 26, 2017

Time: 5:00 PM (Taipei) / 5:00 AM (New York) / 10:00 AM (London)

Dial-in numbers and Access Codes:

USA Toll Free: 1-800 871-3110, 1-888 700-7397

Taiwan Number: 02-2192-8016

Other Areas: +886-2-2192-8016

Access Code: UMC

A live webcast and replay of the 1Q17 results announcement will be available at www.umc.com under the “Investors / Events” section.

About UMC

UMC (NYSE: UMC, TWSE: 2303) is a leading global semiconductor foundry that provides advanced IC production for applications spanning every major sector of the electronics industry. UMC’s comprehensive foundry solutions enable chip designers to leverage the company’s sophisticated technology and manufacturing, which include high volume 28nm High-K/Metal Gate technology, 14nm FinFET mass production, ultra-low power platform processes specifically developed for Internet of Things (IoT) applications and the automotive industry’s highest-rated AEC-Q100 Grade-0 manufacturing capabilities for the production of ICs found in vehicles. UMC’s 11 wafer fabs are strategically located throughout Asia and are able to produce nearly 600,000 wafers per month. The company employs over 19,000 people worldwide, with offices in Taiwan, China, Europe, Japan, Korea, Singapore, and the United States. UMC can be found on the web at http://www.umc.com

Note from UMC Concerning Forward-Looking Statements

Some of the statements in the foregoing announcement are forward-looking within the meaning of the U.S. Federal Securities laws, including statements about introduction of new services and technologies, future outsourcing, competition, wafer capacity, business relationships and market conditions. Investors are cautioned that actual events and results could differ materially from these statements as a result of a variety of factors, including conditions in the overall semiconductor market and economy; acceptance and demand for products from UMC; and technological and development risks. Further information regarding these and other risks is included in UMC’s filings with the U.S. Securities and Exchange Commission. UMC does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.

Safe Harbor Statements

This release contains forward-looking statements. These statements constitute “forward-looking” statements within the meaning of Section 27A of the United States Securities Act of 1933, as amended, and Section 21E of the United States Securities Exchange Act of 1934, as amended, and as defined in the United States Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements by use of words such as “strategy,” “expects,” “continues,” “plans,” “anticipates,” “believes,” “will,” “estimates,” “intends,” “projects,” “goals,” “targets” and other words of similar meaning. You can also identify them by the fact that they do not relate strictly to historical or current facts.

These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual performance, financial condition or results of operations of UMC to be materially different from what is stated or may be implied in such forward-looking statements. Investors are cautioned that actual events and results could differ materially from those statements as a result of a number of factors including, but not limited to: (i) dependence upon the frequent introduction of new services and technologies based on the latest developments in the industry in which UMC operates; (ii) the intensely competitive semiconductor, communications, consumer electronics and computer industries and markets; (iii) the risks associated with international business activities; (iv) dependence upon key personnel; (v) general economic and political conditions; (vi) possible disruptions in commercial activities caused by natural and human-induced events and disasters, including natural disasters, terrorist activity, armed conflict and highly contagious diseases; (vii) reduced end-user purchases relative to expectations and orders; and (viii) fluctuations in foreign currency exchange rates. Further information regarding these and other risks is included in UMC’s filings with the United States Securities and Exchange Commission. All information provided in this release is as of the date of this release and are based on assumptions that UMC believes to be reasonable as of this date, and UMC does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.

The financial statements included in this release are prepared and published in accordance with Taiwan International Financial Reporting Standards, or TIFRSs, recognized by the Financial Supervisory Commission in the ROC, which is different from International Financial Reporting Standards, or IFRSs, issued by the International Accounting Standards Board. Investors are cautioned that there may be significant differences between TIFRSs and IFRSs. In addition, TIFRSs and IFRSs differ in certain significant respects from generally accepted accounting principles in the ROC and generally accepted accounting principles in the United States.

This presentation is not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration. Any public offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from the issuer or selling security holder and that will contain detailed information about the company and management, as well as financial statements.

1 Unless otherwise stated, all financial figures discussed in this announcement are prepared in accordance with TIFRSs recognized by Financial Supervisory Commission in the ROC, which is different from IFRSs issued by the International Accounting Standards Board. They represent comparisons among the three-month period ending Mar 31, 2017, the three-month period ending Dec 31, 2016, and the equivalent three-month period that ended Mar 31, 2016. For all 1Q17 results, New Taiwan Dollar (NT$) amounts have been converted into U.S. Dollars at the Mar 31, 2017 exchange rate of NT$ 30.31 per U.S. Dollar.

2 Revenue in this section represents wafer sales

3 Utilization Rate = Quarterly Wafer Out / Quarterly Capacity

4 Estimated capacity numbers are based on calculated maximum output rather than designed capacity. The actual capacity numbers may differ depending upon equipment delivery schedules, pace of migration to more advanced process technologies, and other factors affecting production ramp-up.

- FINANCIAL TABLES TO FOLLOW -

  UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES
Consolidated Condensed Balance Sheet
As of March 31, 2017
Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$)
     
 
March 31, 2017
US$ NT$ %
Assets
Current assets
Cash and cash equivalents 2,006 60,812 16.0 %
Financial assets at fair value through profit or loss, current 29 867 0.2 %
Notes & Accounts receivable, net 689 20,878 5.5 %
Inventories, net 537 16,262 4.3 %
Other current assets 419   12,718   3.4 %
Total current assets 3,680   111,537   29.4 %
 
Non-current assets
Funds and investments 1,153 34,950 9.2 %
Property, plant and equipment 7,178 217,555 57.3 %
Other non-current assets 506   15,337   4.1 %
Total non-current assets 8,837   267,842   70.6 %
Total assets 12,517   379,379   100.0 %
 
Liabilities
Current liabilities
Short-term loans 622 18,842 5.0 %
Payables 875 26,525 7.0 %
Current portion of long-term liabilities 577 17,496 4.6 %
Other current liabilities 132   4,008   1.0 %
Total current liabilities 2,206   66,871   17.6 %
 
Non-current liabilities
Bonds payable 1,167 35,360 9.3 %
Long-term loans 889 26,952 7.1 %
Other non-current liabilities 1,106   33,515   8.9 %
Total non-current liabilities 3,162   95,827   25.3 %
Total liabilities 5,368   162,698   42.9 %
 
Equity
Equity attributable to the parent company
Capital 4,165 126,243 33.3 %
Additional paid-in capital 1,370 41,518 10.9 %
Retained earnings, unrealized gain or loss on available-for-sale

financial assets and exchange differences on translation of

foreign operations

1,739 52,692 13.9 %
Treasury stock (156 ) (4,719 ) (1.2 %)
Total equity attributable to the parent company 7,118 215,734 56.9 %
Non-controlling interests 31   947   0.2 %
Total equity 7,149   216,681   57.1 %
Total liabilities and equity 12,517   379,379   100.0 %
 
             
Note：New Taiwan Dollars have been translated into U.S. Dollars at the March 31, 2017 exchange rate of NT $30.31 per U.S. Dollar.
 
UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statements of Comprehensive Income
Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$)
Except Per Share and Per ADS Data
               
 
Year over Year Comparison Quarter over Quarter Comparison
Three-Month Period Ended Three-Month Period Ended
March 31, 2017 March 31, 2016 Chg. March 31, 2017 December 31, 2016 Chg.
US$ NT$ US$ NT$ % US$ NT$ US$ NT$ %
Net operating revenues 1,235 37,418 1,135 34,404 8.8 % 1,235 37,418 1,264 38,306 (2.3 %)
Operating costs (990 ) (29,990 ) (969 ) (29,370 ) 2.1 % (990 ) (29,990 ) (975 ) (29,547 ) 1.5 %
Gross profit 245   7,428   166   5,034   47.6 % 245   7,428   289   8,759   (15.2 %)
19.9 % 19.9 % 14.6 % 14.6 % 19.9 % 19.9 % 22.9 % 22.9 %
Operating expenses
- Sales and marketing expenses (38 ) (1,170 ) (33 ) (1,010 ) 15.8 % (38 ) (1,170 ) (43 ) (1,282 ) (8.7 %)
- General and administrative expenses (35 ) (1,050 ) (32 ) (970 ) 8.2 % (35 ) (1,050 ) (50 ) (1,521 ) (31.0 %)
- Research and development expenses (132 ) (3,991 ) (102 ) (3,085 ) 29.4 % (132 ) (3,991 ) (126 ) (3,824 ) 4.4 %
Subtotal (205 ) (6,211 ) (167 ) (5,065 ) 22.6 % (205 ) (6,211 ) (219 ) (6,627 ) (6.3 %)
Net other operating income and expenses 5   154   0   15   926.7 % 5   154   5   144   6.9 %
Operating income (loss) 45 1,371 (1 ) (16 ) - 45 1,371 75 2,276 (39.8 %)
3.7 % 3.7 % (0.1 %) (0.1 %) 3.7 % 3.7 % 5.9 % 5.9 %
 
Net non-operating income and expenses (10 ) (304 ) 2   46   -   (10 ) (304 ) (40 ) (1,210 ) (74.9 %)
Income from continuing operations before

income tax

35 1,067 1 30 3,456.7 % 35 1,067 35 1,066 0.1 %
2.9 % 2.9 % 0.1 % 0.1 % 2.9 % 2.9 % 2.8 % 2.8 %
 
Income tax benefit (expense) 14   430   2   49   777.6 % 14   430   (20 ) (617 ) -  
Net income 49 1,497 3 79 1,794.9 % 49 1,497 15 449 233.4 %
4.0 % 4.0 % 0.2 % 0.2 % 4.0 % 4.0 % 1.2 % 1.2 %
 
Other comprehensive income (loss) (98 ) (2,997 ) (20 ) (583 ) 414.1 % (98 ) (2,997 ) (20 ) (591 ) 407.1 %
 
Total comprehensive income (loss) (49 ) (1,500 ) (17 ) (504 ) 197.6 % (49 ) (1,500 ) (5 ) (142 ) 956.3 %
 
Net income attributable to:
　　Stockholders of the parent 75 2,286 7 210 988.6 % 75 2,286 84 2,548 (10.3 %)
　　Non-controlling interests (26 ) (789 ) (4 ) (131 ) 502.3 % (26 ) (789 ) (69 ) (2,099 ) (62.4 %)
 
Comprehensive income (loss) attributable to:
　　Stockholders of the parent (20 ) (599 ) (12 ) (356 ) 68.3 % (20 ) (599 ) 63 1,902 -
　　Non-controlling interests (29 ) (901 ) (5 ) (148 ) 508.8 % (29 ) (901 ) (68 ) (2,044 ) (55.9 %)
 
Earnings per share-basic 0.006   0.19   0.001   0.02   0.006   0.19   0.007   0.21  
Earnings per ADS (2) 0.031   0.95   0.003   0.10   0.031   0.95   0.035   1.05  
Weighted average number of shares
outstanding (in millions) 12,208   12,408   12,208   12,208  
 
                                         
Notes:
(1) New Taiwan Dollars have been translated into U.S. Dollars at the March 31, 2017 exchange rate of NT $30.31 per U.S. Dollar.
(2) 1 ADS equals 5 common shares.
 
UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statements of Comprehensive Income
Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$)
Except Per Share and Per ADS Data
     
For the Three-Month Period Ended For the Three-Month Period Ended
March 31, 2017 March 31, 2017
US$ NT$ % US$ NT$ %
Net operating revenues 1,235 37,418 100.0 % 1,235 37,418 100.0 %
Operating costs (990 ) (29,990 ) (80.1 %) (990 ) (29,990 ) (80.1 %)
Gross profit 245   7,428   19.9 % 245   7,428   19.9 %
 
 
Operating expenses
- Sales and marketing expenses (38 ) (1,170 ) (3.1 %) (38 ) (1,170 ) (3.1 %)
- General and administrative expenses (35 ) (1,050 ) (2.8 %) (35 ) (1,050 ) (2.8 %)
- Research and development expenses (132 ) (3,991 ) (10.7 %) (132 ) (3,991 ) (10.7 %)
Subtotal (205 ) (6,211 ) (16.6 %) (205 ) (6,211 ) (16.6 %)
Net other operating income and expenses 5   154   0.4 % 5   154   0.4 %
Operating income 45 1,371 3.7 % 45 1,371 3.7 %
 
Net non-operating income and expenses (10 ) (304 ) (0.8 %) (10 ) (304 ) (0.8 %)
Income from continuing operations before

income tax

35 1,067 2.9 % 35 1,067 2.9 %
 
 
Income tax benefit 14   430   1.1 % 14   430   1.1 %
Net income 49 1,497 4.0 % 49 1,497 4.0 %
 
Other comprehensive income (loss) (98 ) (2,997 ) (8.0 %) (98 ) (2,997 ) (8.0 %)
 
Total comprehensive income (loss) (49 ) (1,500 ) (4.0 %) (49 ) (1,500 ) (4.0 %)
 
Net income attributable to:
　　Stockholders of the parent 75 2,286 6.1 % 75 2,286 6.1 %
　　Non-controlling interests (26 ) (789 ) (2.1 %) (26 ) (789 ) (2.1 %)
 
Comprehensive income (loss) attributable to:
　　Stockholders of the parent (20 ) (599 ) (1.6 %) (20 ) (599 ) (1.6 %)
　　Non-controlling interests (29 ) (901 ) (2.4 %) (29 ) (901 ) (2.4 %)
 
Earnings per share-basic 0.006   0.19   0.006   0.19  
Earnings per ADS (2) 0.031   0.95   0.031   0.95  
 
Weighted average number of shares

outstanding (in millions)

12,208   12,208  
                       
Notes:
(1) New Taiwan Dollars have been translated into U.S. Dollars at the March 31, 2017 exchange rate of NT $30.31 per U.S. Dollar.
(2) 1 ADS equals 5 common shares.
 
UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statement of Cash Flows
For The Three-Month Period Ended March 31, 2017
Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$)
   
US$ NT$
Cash flows from operating activities :
Net income before tax 35 1,067
Depreciation & Amortization 439 13,292
Changes in notes & accounts receivable 63 1,895
Changes in other current assets (38 ) (1,149 )
Changes in payables (43 ) (1,296 )
Changes in assets, liabilities and others (17 ) (498 )
Net cash provided by operating activities 439 13,311
 
Cash flows from investing activities :
Acquisition of available-for-sale financial assets (16 ) (481 )
Proceeds from disposal of available-for-sale financial assets 23 701
Proceeds from disposal of investments accounted for under the equity method 65 1,980
Acquisition of property, plant and equipment (582 ) (17,654 )
Others (28 ) (839 )
Net cash used in investing activities (538 ) (16,293 )
 
Cash flows from financing activities :
Proceeds from bonds issued 274 8,300
Proceeds from long-term loans 74 2,258
Repayments of long-term loans (29 ) (885 )
Acquisition of subsidiaries (41 ) (1,228 )
Others (19 ) (600 )
Net cash provided by financing activities 259 7,845
 
Effect of exchange rate changes on cash and cash equivalents (54 ) (1,630 )
Net Increase in cash and cash equivalents 106 3,233
 
Cash and cash equivalents at beginning of period 1,900   57,579  
 
Cash and cash equivalents at end of period 2,006   60,812  
 
         
Note: New Taiwan Dollars have been translated into U.S. Dollars at the March 31, 2017 exchange rate of NT $30.31 per U.S. Dollar.


Contact:

UMC, Investor Relations
Michael Lin, +886-2-2658-9168, ext. 16900
Email Contact
David Wong, +886-2-2658-9168, ext. 16900
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